Hotel rooms and The Perl Conference

In an effort to improve transparency, we have recently released a finance report for The Perl Conference in Alexandria. One of the major expenses in this report was for hotel attrition. In this news article, I will explain what hotel attrition is and what TPF is doing to respond to it.

In the early days of "YAPC" the conference was held on college campuses in North America. Typically a number of dorm rooms would be reserved and made available to attendees at a very low cost. As we all got older, dorm rooms became less attractive and attendees began asking for nicer accommodations. At first, dorm rooms were supplemented with a hotel option. Over time, the hotel room became the only option offered.

How The Perl Foundation secures a group hotel for TPC/YAPC:

First, TPF contacts a hotel and requests a specific number of room-nights for the duration of the event. For example, "We need 700 room-nights across this particular week blocked for our event." If the hotel agrees, then the rooms are held exclusively for registrants of our event until about 30 days prior to check-in. During this time the hotel does not allow any other guests or groups to book those rooms.

The primary benefits of this arrangement are:

Attendees are staying in the same hotel, which makes it easier to connect with each other

TPF is able to negotiate a discounted rate for conference attendees

There's a reasonable guarantee to attendees that hotel rooms will be available for them to reserve, provided they book their room(s) before the cut-off date. This is useful in case the conference city ends up hosting another large event the same week. In those instances, attendees don't have to worry about not being able to attend because they couldn't secure a place to stay

Additional perks also tend to be included, and vary from year to year. In the past they have included better wi-fi connections for our guests, free parking, a certain number of complimentary rooms, and reduced costs for the conference facilities

Hotels know that empty rooms mean lost profits. As a result, the hotel's agreement to block hundreds of rooms for an event comes with the stipulation that a certain percentage of the room-nights must be booked by event guests (this is referred to as "attrition") If TPF does not meet its guaranteed attrition rate, TPF then is obligated to pay the hotel for those empty rooms, as if somebody was staying there.

In most cities, the venue (conference rooms, dining, etc.) and the hotel rooms are all at the same hotel. This significantly affects the process of negotiating the details of room reservations since the hotel is benefiting from the conference room rental and food in addition to just rooms. So in these cases, we are often able to negotiate a better deal all around.

How reservation trends have changed:

Since we have been reserving hotel rooms for several years, we use the room numbers from previous years to determine how many rooms to reserve for the current year. Before TPC::NA 2017, meeting the agreed upon attrition rate had never been an issue. The number of nights TPF reserved in Alexandria was very similar to years past. In Orlando in 2016 and in Salt Lake City in 2015, we ran out of rooms and so we never imagined we would fall short this year.

This year marks the very first year that TPF was unable to meet the attrition rate for the conference hotel. TPF had a required room attrition rate of 72% on its block of 695 room-nights, meaning that we needed to book at least 500 room-nights. However, we fell just short of this requirement and, as a result, TPF ended up owing the hotel an additional amount of $10,657.

Our previous under-supply of rooms has unexpectedly become an over-supply, which makes guessing how many room-nights to reserve in the future quite a difficult task. We don't know exactly why fewer attendees are choosing the conference hotel, but we do have a few theories:

Some venues provide more opportunity than others for selecting an alternate hotel. For example, there were a number of alternate hotels within walking distance of the Alexandria venue, while such options didn't exist for Orlando

More employers are starting to require their employees to stay at a specific hotel brand when funding their travel

Services such as Airbnb, and even our sponsor Booking.com, make it easier for people to find discounted rooms on their own. Sometimes those discounted rooms are even at the same hotel where the rest of the event guests are staying

This has also been an extraordinary year in the United States for many reasons, some of which have impacted international travel. TPC::NA has been lucky to attract many attendees from Europe and around the world on a regular basis, but changes in US policies have made international travel more challenging. Organizers heard from several people who have regularly attended TPC::NA in the past that they did not come to Alexandria because of these changes. While anecdotal, it's reasonable to assume attendance and some of the room reservations were impacted by these factors.

A common question is "Why are the conference hotel rooms so expensive? I can get a room in the same hotel cheaper on Booking.com." There are really three answers to that. Firstly, TPF doesn't set the price of the room-nights. The hotel offers us discounted room-night rates and TPF can either accept or decline the offer. Secondly, there are often different qualities of rooms within the same hotel. TPF arranges for a single tier of rooms, excluding those of inferior quality. Additionally, the "cheaper" rooms do not receive the same perks as those arranged for attendees staying in the TPC block of rooms. Finally, while it is possible to get one or two, or even ten, rooms at a deeply discounted rate from Booking.com or similar, getting 150 or more rooms every night for nearly a week at that price is not a practice in which any hotel would be willing to engage. Hotels may be willing to let a few rooms go deeply discounted in order to reach 100% occupancy, but it isn't financially viable for them to offer those room rates to everybody. Acquiring rooms for a large group is much more complicated than getting a single room, and more expensive. Your ability to find a single room cheaper does not mean the organizers did a bad job negotiating the hotel rate.

How TPF is responding:

This year TPF paid out more than $10,000 to the hotel for empty rooms and we wanted to be transparent about this and let the community know. That is $10,000 that could have been used to fund a round of grants, to promote Perl, or to buy every Perl developer a nice dinner. While it is unfortunate that it happened, it wasn't possible to foresee the drastic difference given the data organizers had to work from. Now that it has happened, TPF and the TPC::NA organizers will learn from the experience and do what they can to ensure it doesn't happen again next year, starting with reducing our numbers for room blocks

This does mean that TPF will lose some leverage in negotiating event costs. This could begin a spiral which leads to TPF eventually being forced to discontinue providing conference rate rooms altogether.

The good news is that even with the attrition expenses, the total cost for the conference came in narrowly within budget. TPF and the conference teams will continue to work to make sure The Perl Conference remains an economical option for the Perl community to get together every year and talk about the language we love. Increasing attendance numbers not only helps keep TPC healthy, but also allows TPF to focus more resources on improving Perl. All community members can help by blogging about their experience this year. If you're feeling even more motivated to help, we can always find space for people on the conferences committee as well.

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Comments (1)

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Mon, 14-Aug-2017 by tombrowder

The main reason I didn't use the conference hotel was distance from the conference site. It is really a plus to have it all together.